Phoenix close to deal with its banking group

PHOENIX Group Holdings, the closed life assurance funds group created by entrepreneur Hugh Osmond , is said to be close to a breakthrough in its talks with its banking group over the extension of its £2.5bn of gross debt.

According to sources, the group is close to announcing an equity issue that will enable some of its debt pile to be repaid ahead of the expiry of the bulk of the group's debt facilities in 2014.

Protracted discussions with the banking group have been going on now for more than 18 months but chief executive Clive Bannister recently said, after producing a good set of results, that the company had more financial flexibility to strike a deal. Key investors are believed to be happy to support a share issue.

Osmond, who founded the group then known as Pearl, is a non-executive director and substantial shareholder.

Phoenix shares closed at 591p, valuing the group at £974m. Any equity will likely be issued at a discount.